Here's the
official explanation provided by the GMAC for this question:
This sentence compares moderately priced homes to homes at the top of the market, predicting how much the homes in each category will likely decline in value if certain tax revisions are passed. The main clause uses the indicative mood to predict the effect of enacting the tax increase. Since the subordinate clause elaborates on the prediction in the main clause, it should likewise use an indicative verb form suitable for describing future events. The wording must clearly, concisely, and idiomatically compare the moderately priced homes to the homes at the top of the market; homes should not be compared to themselves or to a drop in value.
Option A: Since the main clause uses an indicative future tense, and the subordinate clause elaborates on the prediction in the main clause, the subjunctive
would is inappropriate. The use of
liable is strained in this context;
liable suggests being potentially subject to a bad consequence, whereas suffering less of a drop in value is a relatively good consequence.
Option B: As explained above, the subjunctive
would is inappropriate, and the use of
liable is strained in this context. The use of
if as an unclear shorthand for
they would if they were implicitly compares the moderately priced homes under predicted circumstances to themselves under imaginary circumstances. But since the comparison elaborates the prediction about how
the proposed tax revisions will adversely affect all homeowners, the context suggests that the writer intended to compare the tax revisions' predicted effects on different homes of different values.
Option C: The use of
if as an unclear shorthand for
they would if they were implicitly compares the moderately priced homes under predicted circumstances to themselves under imaginary circumstances. But since the comparison elaborates the prediction about how
the proposed tax revisions will adversely affect all homeowners, the context suggests that the writer intended to compare the tax revisions' predicted effects on different homes of different values.
Option D: This absurdly compares the drop in value to the homes at the top of the market, rather than comparing moderately priced homes to homes at the top of the market as intended.
Option E: Correct. This correctly compares moderately priced homes to homes at the top of the market and appropriately uses the indicative verb form
are rather than the conditional verb form
would to elaborate on the prediction in the main clause.
The correct answer is E.
Please note that I'm not the author of this explanation. I'm just posting it here since I believe it can help the community.